UK takes losses until it decides it is a bad idea, and gives up and goes to a distant blockade. Submarines and torpedo boats will hunt the ships that are just a few 10's of miles from port. Germany will lose some submarines and torpedo boats, but the British losses will be worse.
We have an example in WW1, near Gallipoli. The British kept ships in a pattern similar to what a close blockade in the North Sea would have been. The Germans had very few U-boats in the area (3-6 from memory), and second class Ottoman lighter ships. These ships claimed 3-4 capital ships in the Feb-June 1915 time frame. In the North Seas, the Germans will have up to 144 torpedo boats that can be used, well over 20 submarines. It will be short and bloody for the Royal Navy, who will pull back and can whoever decide to do a close blockade. My guess is the "close blockade" phase would last under 4 weeks, perhaps just a few days.
If writing a TL, there is only three big questions.
1) How do I write a POD that passes the smell test?
2) How many major ships is the British Admiralty willing to lose before retreating?
3) If the Germans get some initial success, would they be dumb enough to come out and fight with the main fleet?
Besides the unfortunate death of a few thousand more British Sailors and dealing with a flock of butterflies related to USW, German morale, and when neutrals enter the war; I don't see it changing much unless you get to the ASB part when the UK refuse to abandon the close blockade.